Why are people on Wallstreet so god damn jumpy? Why can't people fucking take bad news into stride? Until you see it on ALL of the news services and at least some kind of official statement that is NOT twitter based, people need to grow some fucking balls.

Because it is primarily controlled by trading bots with orders to do X when Y happens so X occurs nigh automatically. Wall Street isn't a bunch of guys yelling out trades on the floor like some 1980s movie, well it might be in part, but it is primarily a bunch of special software automatically doing everything.

Because it is primarily controlled by trading bots with orders to do X when Y happens so X occurs nigh automatically. Wall Street isn't a bunch of guys yelling out trades on the floor like some 1980s movie, well it might be in part, but it is primarily a bunch of special software automatically doing everything.

I keep seeing stories of hacked Twitter accounts. Are the organizations just using really bad passwords or is there an exploit that is being exploited?

Sometimes it's just a weak password. In the case of corporate and celebrity accounts, usually the same password is known to several different people, dramatically increasing the likelihood of it accidentally leaking.

In this particular case, evidence is pointing to spear phishing of the organization. Phishing has a nearly 100% success rate in getting a foothold into a corporate network and it could, if well-executed, get around many forms of two-factor auth (think fake login pages asking for your RSA token's current value) - so I don't think it's fair to blame Twitter itself in any case.

I do however look forward to two-factor for Twitter as it's actually my singly most important account from my perspective, my main identity provider.

Because it is primarily controlled by trading bots with orders to do X when Y happens so X occurs nigh automatically. Wall Street isn't a bunch of guys yelling out trades on the floor like some 1980s movie, well it might be in part, but it is primarily a bunch of special software automatically doing everything.

Because it is primarily controlled by trading bots with orders to do X when Y happens so X occurs nigh automatically. Wall Street isn't a bunch of guys yelling out trades on the floor like some 1980s movie, well it might be in part, but it is primarily a bunch of special software automatically doing everything.

Saying "mom-and-pop traders" makes it seems like normal people are affected by this. They're not. Nobody's retirement account is affected by a brief dip in the market.

The people getting hammered by HFT are day traders. They're the ones pushing to regulate HFT by tricking you into thinking that it's regular people being affected, when in reality they just upset about getting their lunch eaten.

Because it is primarily controlled by trading bots with orders to do X when Y happens so X occurs nigh automatically. Wall Street isn't a bunch of guys yelling out trades on the floor like some 1980s movie, well it might be in part, but it is primarily a bunch of special software automatically doing everything.

And those bots follow twitter accounts? Yikes!

It's been reported here, that the major trading firms have mega servers that literally watch every single story, every second of the day, and within a second, will sell stock on receipt of bad news. A new article just popped up saying Apple suppliers show less demand? Sell apple stocks. The normal people have no chance to catch up with these jerks.

I have to give kudos to those people who hacked the account, because they did what I wanted to do: show how messed up wall street trading is nowadays.

the boston marathon bombing, according to memory, was really the first national manhunt/terrorist story of the social media age of Facebook/twitter/et al. while it provided the police with a wealth of crowdsourced information, it also had the potential to ruin potential operations (Boston PD asked the public to not share police activity they witnessed around town AND shut down their own feed). from a news reporting perspective, it was an absolute nightmare as multiple news outlets decided to treat tweets from correspondents and regular citizens as FACT without seemingly any sort of confirmation. and here we have another false report from a twitter feed with the potential of market manipulation. personally i find it annoying that i need to look up multiple news sources just to confirm breaking news. if we're going to adopt the instant reporting capabilities without a return to improved journalistic integrity and confirmation, and in this case the ability to avoid a freakin phishing attack, there will only be more opportunities for very creative criminals.

Skynet running the stock market? We were wrong on where the sentient human-killing A.I. would evolve from.

David Brin has been suggesting that on his blog for some time now, specifically pointing at the stock trading software.

It is no surprise I'm not the first to think of just how dangerous it is to let machines run a critical system like this. Although it would be nice to find that whoever is in charge of them would come to see the inherent danger of it. That would be like asking banks to forgive loans. Never happen.

Traders see the initial tweet. Think O-shit, this'll mess things up, sell my volatiles buy something safe. The bots running everything process that, see other bots selling and their automatic software jumps in and starts selling everything like crazy. Other traders see that happening, check the news, see it's a fake and tell their bots to buy, the bots do that, see the other bots buying and they buy like crazy till they hit there top end and the software goes back to scamming pennies and tenthpennies off the top of every trade that is going through by slower bots not sitting in the same rack as the exchange computers.

The stock market is bullshit and this is why I don't use it. Stupid stuff like this and the previous error that had to be "unwound". It's supposed to be whether or not a company is doing well. Instead it's just robot lemmings.

Because it is primarily controlled by trading bots with orders to do X when Y happens so X occurs nigh automatically. Wall Street isn't a bunch of guys yelling out trades on the floor like some 1980s movie, well it might be in part, but it is primarily a bunch of special software automatically doing everything.

And those bots follow twitter accounts? Yikes!

I wouldn't be surprised honestly...

Well sure. Everyone knows that the market panics and takes a nose-dive when really really bad news gets out. If you're in charge of a few billion dollars at your firm it would be prudent to have some sell-off algorithms in place to be one of the first ones out when bad news hits.

Because it is primarily controlled by trading bots with orders to do X when Y happens so X occurs nigh automatically. Wall Street isn't a bunch of guys yelling out trades on the floor like some 1980s movie, well it might be in part, but it is primarily a bunch of special software automatically doing everything.

And those bots follow twitter accounts? Yikes!

I would have to see it to believe it. Initial moves by actual people could set off a situation that is compounded by HFT, but I have a hard time believing that is actually tied into Twitter directly.

I don't get why any particular stock should drop after news like this. (And hence the market as a whole, I suppose.)

"OMG the white house blew up, SELL GOOGLE!"

Perceptions of future volatility and risk or uncertainty increased. Would it mean future war and more government debt to finance it? What does it mean for federal policy on any number of issues if the president would possibility be killed?

The stock market is bullshit and this is why I don't use it. Stupid stuff like this and the previous error that had to be "unwound". It's supposed to be whether or not a company is doing well. Instead it's just robot lemmings.

Stick some money in an S&P500 fund for 20 years and you'll be insulated from all of these short-term shenanigans.

(I'm not saying you're guaranteed any kind of return if you do that. I'm just saying that a diversified, long-term investment will track the performance of corporate America as a whole, over time. These little blips will be meaningless to that kind of strategy.)

I think the paragraph before the blockquote is somewhat misleading, implying that a "well-positioned trader who immediately recognized the report was false" would be "manipulating the markets." True, it's possible that the entity that generated the fake tweet could have made some serious cash by taking advantage of the very quick gap in asset prices, either by starting a short position before the tweet and covering it shortly after, and/or by purchasing after the sharp gap down. However, I wouldn't say that a savvy trader who purchased after seeing the sharp gap down is any kind of market manipulator. You're supposed to buy low!

A look at a chart from today shows that the period of time where markets had suffered a "significant" decline (although as someone else pointed out, a 1% decline isn't exactly "blood in the streets") was approximately three minutes. By the 5-minute mark, the S&P futures market (which is a very liquid, heavily-traded proxy for the index's value) had completely recovered its previous level and was slightly above its mark before the tweet. So yes, someone would have had to move quickly in order to take advantage of the drop. 1-2 minutes is plenty of time for an active trader to initiate an order; that's well beyond HFT territory.

Therefore, it is possible that some human traders were able to profit off of this event, provided their orders were able to be filled during that time period.* To the "mom and pop" investor, this shouldn't even be a blip on the radar**; after the gap was filled, trading the rest of the day was orderly. I don't think it's a reasonable expectation that the casual investor should be able to take advantage of intraday moves like this; it's not your day job. Most active traders, on the other hand, should have been able to pounce on this opportunity, provided that they correctly recognized that the tweet was fake and decided to speculate on a quick price recovery.

* There was a large drop in liquidity in the S&P 500 futures market when the sharp move occurred. Therefore, it's possible that a buy order placed near the lows wouldn't be filled due to the lack of willing counterparties willing to sell to you at that point.

** Not a blip on the radar in the sense that the mom-and-pop investor typically has a much longer-term focus than this. However, I'm not saying that the casual investor shouldn't be concerned that a single fake tweet like this can cause billions of dollars in trades to occur within seconds, moving prices by a nontrivial amount. That fact is worrisome; as others have pointed out, it's likely that the move was driven heavily by algorithmic trading, possibly even trading upon automated parsing of news feeds on Twitter and elsewhere.

Why are people on Wallstreet so god damn jumpy? Why can't people fucking take bad news into stride?

Because markets no longer operate on fundamentals, they operate on emotion and supposition.

Some of the most simple models of asset pricing involves prices being impacted by "bad news" or good news for that matter. New information changes the valuation of assets, seeing that the perception of future cash flows, which the underlying assets value is based on, may be changing based on the news.

It is altogether another point whether or not high frequency trades supposed benefits of providing extra liquidity to markets outweigh the possibility of them compounding the negative impact of incorrect news, and the transaction cost that would be associate with short run deviations as seen in this example.

So the twitter account was hijacked via social engineering, not hacked.

The term hacked is being thrown around these days for most incidents like this, but it seems inaccurate and is kind of annoying.

In my notoriously arrogant opinion:

It'd be incorrect to refer to software being "hacked" by social means, but an account is a different matter. Especially since it probably involved technological steps (fake login pages, malware running locally, etc). You wouldn't expect anyone to say "sorry about that silly post, my brother illicitly gained access to my account!"

So, Twitter wasn't hacked, AP may or may not have been hacked, but the @AP account was.